Dear Reader,

Today's overview of economic news and market action:

• • Stock markets lost some ground last week … 
  • Meantime, the dollar remained in the ascendancy on currency markets …
  • Sees EUR/USD open in the lower half of $1.07-1.08 … 
  • GBP/USD is operating near the $1.25 threshold … 
  • EUR/GBP is in the top half of 85-86p …
  • This week, the focus will be on the ECB meeting  on Thursday ….
  • Market pricing is leaning towards the ECB putting policy on hold, but decision will be a close call …
  • Data-wise, UK labour market and GDP (Jul), and US CPI inflation (Aug) are due …

Some Buck

Although the US dollar has retreated from last year’s peaks, which saw it reach its highest level on a trade-weighted basis in 20 years, it has remained at very elevated levels in 2023.

AIB Ireland Services PMI - August

Strong growth in the Irish service sector was sustained during August with the latest AIB PMI® survey data marking exactly two-and-a-half years of successive monthly improvements in business activity, new business, and employment.

Economic data, especially on labour markets, have generally surprised to the upside to date in 2023. Global economy, though, still facing considerable headwinds, with risks to the downside.

Downside Risks Still Prevail for Global Economy

Surging inflation combined with a marked tightening of monetary policy, amid an environment of weakening confidence levels and heightened geo-political tensions, especially in relation to Ukraine, saw the world economy slow sharply during 2022. However, concerns that advanced economies could be facing a recession in 2023 have largely abated.